How to Use This Loan Comparison Tool
Enter the loan amount, interest rate, and tenure for Loan A and Loan B. You can compare two offers from different banks, model the impact of a balance transfer, or see how much you save by choosing a shorter tenure. The comparison summary at the bottom shows the exact difference in monthly EMI, total interest, and total payment.
When to Use a Loan Comparison Calculator
- Comparing bank offers: You have quotes from two lenders and want to see the true cost difference.
- Balance transfer decision: Your existing lender offers 9.5%, a new lender offers 8.75% — is the switch worth it?
- Tenure optimisation: Compare a 20-year vs 15-year tenure at the same rate to see the interest saved.
- Fixed vs floating rate: Model a fixed-rate loan against a current floating rate to see the break-even point.
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Frequently Asked Questions
How do I compare two loans effectively?
To compare two loans, look at three numbers: monthly EMI (affects your cash flow), total interest payable (the true cost of borrowing), and total payment (principal + interest). A lower EMI is not always cheaper — a longer tenure may reduce your EMI while costing much more in total interest. Use this calculator to compare all three metrics side by side.
Should I choose a lower EMI or a shorter tenure?
A shorter tenure always costs less in total interest, even though the monthly EMI is higher. For example, a ₹30 lakh home loan at 8.5% p.a. over 20 years costs about ₹37.8 lakh in total interest. The same loan over 15 years costs only about ₹27.1 lakh — saving over ₹10 lakh. Choose the shorter tenure if you can comfortably afford the higher EMI.
What is loan balance transfer and when does it make sense?
A balance transfer moves your outstanding loan to a new lender at a lower interest rate. It makes financial sense when the interest saving over the remaining tenure exceeds the processing fees and switching costs (typically 0.5–1% of the outstanding amount). Use this calculator to compare your current loan with a lower-rate option to quantify the savings.
Does a 0.5% difference in interest rate matter?
Yes — significantly on large, long-tenure loans. On a ₹50 lakh home loan over 20 years, the difference between 8.5% and 9% p.a. is about ₹3.5 lakh in total interest. On a ₹1 crore loan, it is nearly ₹7 lakh. Enter both scenarios in this calculator to see the exact impact for your loan.